More Proof that the Internet Will Save Wireless Carriers

A report out from Chetan Sharma Consulting proves that data is the big story when it comes to wireless operators in the United States. Driven by flat-rate plans, increasing 3G coverage and the iPhone, data spending reached $8.2 billion for the second quarter of 2008, or about 21 percent of the total wireless services revenue. The boost in wireless services increased average revenue per user by 5 percent to 50 cents, offsetting a 5-cent decline in voice ARPU.

Verizon, which leads U.S. wireless operators with its 60 percent 3G subscriber penetration, saw the most growth in 3G usage and the most data revenue — $2.6 billion for the quarter. However, AT&T, the exclusive provider to the Internet-friendly iPhone, had only 25 percent 3G subscriber penetration but also saw its data sales come close to Verizon’s at $2.5 billion, proving that the Internet on the phone is a powerful driver of data revenue.

In the big picture of wireless revenue, carriers grew sales by 8.6 percent for the second quarter compared to the same period in 2007. In the second quarter of 2008 data revenue saw 40 percent growth. The numbers show we’re moving toward ubiquitous broadband in the United States but that we still have a ways to go. The average 30 percent 3G subscriber penetration rate could be improved, but perhaps cheaper 3G plans and Internet-friendly phones will pump up both subscribers and data revenue.